Question 1

Martin,Leah,and Pablo are considering forming a business.What factors should they consider in making a choice of organization?

Accepted Answer

A)  Ease of creation and operation. 
B)  Whether there is personal liability for the owners. 
C)  How the owners will be taxed. 
D)  All of the above. 
A)  Ease of creation and operation. 
B)  Whether there is personal liability for the owners. 
C)  How the owners will be taxed. 
D)  All of the above.

Question 2

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

Accepted Answer

A) True 
 B)False

Question 3

The Federal Trade Commission will not allow the sale of franchises that are unfair to the franchisee.

Accepted Answer

A) True 
 B)False

Question 4

LLCs have become popular for all except which of the following reasons:

Accepted Answer

A)  management flexibility. 
B)  tax status as a partnership. 
C)  uniformity of law. 
D)  limited liability. 
A)  management flexibility. 
B)  tax status as a partnership. 
C)  uniformity of law. 
D)  limited liability.

Question 5

Debra and Lawrence have an equal partnership.This year,after expenses,the partnership had a profit of $200,000.Debra and Lawrence will each pay taxes on:

Accepted Answer

A)  whatever they receive from the partnership. 
B)  $50,000. 
C)  $100,000. 
D)  None of the above. The partnership itself will pay the taxes on the business's profit. 
A)  whatever they receive from the partnership. 
B)  $50,000. 
C)  $100,000. 
D)  None of the above. The partnership itself will pay the taxes on the business's profit.

Question 6

Jill was a limited partner in a retail business that was sued by a customer who fell in the store.The customer claimed the business was negligent in caring for its floors.Which statement best describes Jill's potential liability?

Accepted Answer

A)  Jill has no potential liability to the customer. 
B)  Jill can be held personally liable to the customer since she is a partner. 
C)  Jill can only be liable to the amount of her investment. 
D)  Jill is personally liable, but the woman must first collect from the general partners before collecting from Jill. 
A)  Jill has no potential liability to the customer. 
B)  Jill can be held personally liable to the customer since she is a partner. 
C)  Jill can only be liable to the amount of her investment. 
D)  Jill is personally liable, but the woman must first collect from the general partners before collecting from Jill.

Exam 31: Starting A Business

Martin,Leah,and Pablo are considering forming a business.What factors should they consider in making a choice of organization?

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

The Federal Trade Commission will not allow the sale of franchises that are unfair to the franchisee.

LLCs have become popular for all except which of the following reasons:

Debra and Lawrence have an equal partnership.This year,after expenses,the partnership had a profit of $200,000.Debra and Lawrence will each pay taxes on:

Jill was a limited partner in a retail business that was sued by a customer who fell in the store.The customer claimed the business was negligent in caring for its floors.Which statement best describes Jill's potential liability?

Introduction To Law

Business Ethics And Social Responsibility

Dispute Resolution

Common Law,Statutory Law,And Administrative Law

Constitutional Law

Intentional Torts And Business Torts

Negligence And Strict Liability

Crime

International Law

Introduction To Contracts

Agreement

Consideration

Legality

Capacity And Consent

Written Contracts

Third Parties

Performance And Discharge

Remedies

Practical Contracts

Introduction To Sales

Ownership And Risk

Warranties And Product Liability

Performance And Remedies

Secured Transactions

Creating A Negotiable Instrument

Liability For Negotiable Instruments

Accountants' Liability

Agency Law

Employment Law

Labor Law

Partnerships

Life And Death Of A Corporation

Corporate Management

Shareholders

Securities Regulation

Bankruptcy

Antitrust

Consumer Law

Environmental Law

Cyberlaw

Intellectual Property

Real Property And Tenant-landlord Law

Personal Property And Bailment

Planning For The Future: Wills,Trusts,And Insurance

Filters